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CMC has highest SVR at 12.5%

Cheshire Mortgage Corporation has been highlighted as the lender with the highest SVR in the mortgage market – currently 12.5%, more than double the industry’s average of 4.79%.

Research from Largemortgageloans.com shows that out of 62 mortgage lenders, Cheshire Mortgage Corporation, part of the Blemain Group, has the highest SVR, with Direct Line the lowest at 2%.

GE Money Home Lending’s igroup charges the second highest SVR at 8.59%, with Lloyds, Nationwide and Cheltenham & Gloucester coming in as joint second lowest at 2.50%.

Cheshire Mortgage Corporation offers adverse residential mortgages, shared ownership and bridging finance.

One broker, who wishes to remain anonymous, says: “The adverse credit sector desperately needs more competition. Because Cheshire Mortgage Corporation is one of the only lenders offering adverse deals it can charge a high SVR and borrowers can’t remortgage elsewhere.”

Nobody from CMC was available for comment.

The research also shows that overall the lenders with the highest SVRs are building societies.

Last week Nationwide increased the SVR on residential and self-cert mortgages with The Mortgage Works and increased the SVR for some UCB Homeloans customers.

But Paul Welch, managing director of largemortgageloans.com says sometimes it is good news for brokers when lenders start to increase their SVRs.

He says: “It’s a question of survival for brokers at the moment and if lenders are changing their SVRs it gives brokers a reasonable excuse to get in touch with clients and see if they can get them a better deal.”
 

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  • Paul Goldsmith 3rd February 2010 at 4:13 pm

    Mick is right, a ‘risky’ client cannot have access to the same rates as a ‘prime’ client. The reason CMC are so busy is that they are pretty much last man standing in the adverse market but this leaves too much power with the lender. The reality is they can now cherry pick the best cases and have a minimal risk. Until there is some competition in the sector they can continue to lend however they like, at a rate they choose.

  • mick mcmanus 3rd February 2010 at 2:52 pm

    This has nothing to do with TCF though. Whats the alternative? Give someone with 5 CCJs and umpteen defaults an SVR of 3%?

  • Mike Wells 2nd February 2010 at 1:25 pm

    YES THEY SEEM TO BE GETTING BUSINESS, THEIR BDM TELLS ME THEY ARE SNOWED UNDER.

  • salil chaudhari 1st February 2010 at 9:47 pm

    Are these people getting any business at such ridiculous rates?

  • John Gilbert 1st February 2010 at 4:21 pm

    I fear there are alot of people who were talked into taking out mortgages in the boom years of 2006-7 and are now falling ever deeper into debt, while avoiding becoming a repossession statistic. Research into mortgage intentions showed weak demand among consumers in this period but near record levels of mortgage approvals. Until then approvals and intentions had tracked each other well. Something odd seemed to be going on.

  • Mike Wells 1st February 2010 at 2:27 pm

    Blemain have always offered an svr in excess of 10%, or at least for the last 5 or 6 years. I cannot recall them changing the rates during rises and falls so I dont think their is any need to panic about possible increases. Blemain will only do 50% ltv anyway so their market is very limited.

    also does anybody remember a product, i think it was with first active, many moons ago that was aimed at the subprime market but rewarded the borrower with a reduction in rate every 3 months for 2 years until they were on high street rates if they did not default on payment?

    maybe we can see a product like this appear once more to help those who were made redundent in the recession and now have a blip which is not in keeping with their previous account history.

    the problem with most subprime was you could see a history of remo after remo after remo where clients got in the mire and continued with old habits until eventually they ran out of equity and lenders.

  • Ron O'Brien 1st February 2010 at 1:36 pm

    There is a significant tragedy building here with a large number of people who are financially impaired and have nowhere to go with their mortgage needs.

    The word loan shark is perhaps a bit emotive however, the FSA should seek an understanding of why these remaining adverse lenders are clearly profiteering at some 260% above the SVR average and unless they can prove their cost base and risk factors are so very different they should be made to reduce their margins accordingly.

    Failure to deal with this issue will I am sure result in a considerable number of repossesions once the BOE raises the base rate.

  • Ron O'Brien 1st February 2010 at 1:36 pm

    There is a significant tragedy building here with a large number of people who are financially impaired and have nowhere to go with their mortgage needs.

    The word loan shark is perhaps a bit emotive however, the FSA should seek an understanding of why these remaining adverse lenders are clearly profiteering at some 260% above the SVR average and unless they can prove their cost base and risk factors are so very different they should be made to reduce their margins accordingly.

    Failure to deal with this issue will I am sure result in a considerable number of repossesions once the BOE raises the base rate.

  • brian harris 1st February 2010 at 12:30 pm

    Mortgage advisors are entirely to blame.
    If they stopped using these sharks they would soon go away. All very well saying ‘it was the only option’ Rubbish!
    Far better to accept and face up to the consequences of a bad status position now than simply put off the evil day when these extortionate money grabbers ruthlessly seek their extortionate gains.
    Brokers who use these sharks should not be allowed to trade. And where is the FSA in all of this? Chasing small advisors who are striving to make a decent living and help people in problem situations, with their TCF nonsense.
    Roll on a Conservative Government which is hopefully going to get rid of these over paid and closseted idiots who couldn’t run a bun fight.

  • Lee Wisener 1st February 2010 at 12:29 pm

    TCF only applies when someone needs an out 😉

    I agree with the point that more competition is needed in the adverse market however, I am still more interested to see how the market is going to deal with all those customers who’s brokers took out self cert and were creative about their income.

    So many people dont have the option of re-mortgaging in the current market simply because their true income cant support it.

  • Das 1st February 2010 at 12:07 pm

    Whatever happened to TCF?!!

  • Sam Cox 1st February 2010 at 11:10 am

    even as a mortgage broker, I’ve always found it amazing that banks will take people who have been crippled by debt previously and already demonstarted an inability to maintain commitments and offer them a mortgage at an extortionate rate, charge them extortinate fees then lock them in at an extortionate rate and generally do everything they can to ensure they once again default on their mortgages and loans, these poor people should never have been offered mortgages in the first place, the whole adverse sector of the market is corrupt, an adverse product should help the borrow to rehabilitate not drive them further into to debt, it’s exploitation and a classic example of a banks desire for revenue over client welfare.

  • Mortgage Broker N3 1st February 2010 at 11:10 am

    CMC and Blemain are the only lenders who were in that market – and now they are acting like loan sharks. I stopped using them after 1 case – the client remortgaged via HSBC on a high rise – and Blemain clawed back my commission – unheard of for proc fees.

    I feel sorry for any borrower with them.